U.S Tax Reporter Year End 2023

[graziela]

Another Year with our U.S. Tax Reporter Year End blog. If you have questions about 2023 Year-End reporting, you can post it here. This blog will be updated with tips, best practices and, SAP Notes related to this subject.

Legal Changes for US

To review the planned Legal changes for US, start the Announcement of Legal Change application. You can find detailed information about the Announcement of legal changes on this blog.

ASUG Webcast

ASUG Webcast: HCM U.S. Payroll and Tax Reporting 2023 Year End Update 

ASUG Webcast for SAP HCM U.S. Payroll and Tax Reporting 2023 Year End Update was conducted on October 5, 2023.

Recording and slide deck for the ASUG webcast can be found at the event page on ASUG website. Slide deck is also attached to SAP Note 3357714.

Notes to be implemented after the Year End Support Package

3415649 - REC: RPCPRRU0 report incorrectly considering the amount of wage types as negative
3411592 - Reconciliation report scheduler: replacing background options values with default values
3397030 - REC: Payroll Reconciliation Report incorrectly considering wage types as tax type
3386241 - REC: RPCPRSU0 report background jobs getting cancelled when no ALV Variant is provided
3383757 - REC: Wage type side effect correction for Payroll Reconciliation Report
3379534 - REC: RPCPRSU0 report spool request not generated when Background Processing option is selected
3407068 - TAX: PPE parameter incorrectly sent in payment types other than regular
3381685 - TR: Form W-2 not being generated for employees that have only manual entries for a Tax Company
3402664 - TR: Medicare wages in W-2C reported even with no changes to Social Security wages

Year End Notes

3357714 - U.S. Tax Reporter Year End 2023 Announcement
3358191 - Year End 2023 Phase I for U.S. Tax Reporter
3377633 - TR: Year End 2023 Phase II for U.S. Tax Reporter
3412754 - TR: Year End 2023 Phase III for U.S. Tax Reporter
3419714 - TR: Year End 2023 changes to the electronic file formats W-2 and W-2C for Puerto Rico)
3357769 - W-2 / 1099-R Forms, Envelopes and PR Approval letter for year 2023

User Guides and Resources

3368649 - SAP HCM U.S. Tax Reporter Solution Document

2464078 – TR: 1099-R User Guides for HCM US Tax Reporter configuration

2464161 – TR: W-2 User Guides for HCM US Tax Reporter configuration

2463999 – TR: Tax Reporter User Guides for HCM US Tax Reporter configuration
1406971 – FAQ: Troubleshooting PDF Forms in US Tax Reporter
544849 – FAQ: Tax Reporter Note

 In addition, detailed Tax Reporter documentation for EHP8 is available on SAP Help Portal. To get Tax Reporter documentation of an older release click in the portal on SAP ERP HCM, then change the version on the upper right corner, and search for “Tax Reporter (PY-US-TR)”.

KBAs (Knowledge Base Articles)

3081097 – KBAs (Knowledge Base Articles) for Payroll USA
2918093 – After upgrade issue with the position of text and alignment

 

Annual Limits

3398804 - BEN: Annual limits year 2024
3349693 - BEN: Limits for HSA in tax year 2024
3417661 - GARN: IRS Publication 1494 for tax year 2024

 

Educational Videos

2480185 – TR: Tax Reporter – Online W-2 Enhancements videos

Kind regards,
Graziela

[maddilety_kanuku]

@graziela.dondoni any update on this please once you have a minute.  thank you!

[graziela]

Hello Kanuku,

I didn´t find any change under PY-US that could cause this.

In doing further researches and let you know.

Kind regards,
Graziela

[joe_jones2]

Hi Graziela, On another topic above for WA Cares Act going on BOX 14 of the W2. Is there any updated on if SAP is going to provide this update on the SAP W2 or TEMSE file?

Hi Graziela,

In this legal announcement months ago at the bottom it says Taxable/Reportable Wage Rule:
Guidance on whether or not the WA Cares Fund Premium deduction will be reported on Form W-2 is pending. However, it will most likely follow the Washington PFML rule.

It's December and I haven't seen anything on the reporting on the W2. Please advise.. Thank you, Joe

Reinstatement of WA CARES Fund deductions effective 01 July 2023

 

Country/Region:

USA (US)

Component:

PY-US

Planned Delivery Date:

03/24/2023

Note:

3316629;

My Completion Status:

New

Manual Activity:

BASICPREREQUISITE NOTES

Activate item to go to section in page

Introduction

In 2021, (under the provisions of 2019 HB 1087), Washington established a long-term care benefit program for Washington workers called the WA Cares Fund. The program implements a mandatory deduction from employee wages which will be used to fund certain long-term care benefits for eligible Washington residents.

The WA Cares Fund Program was originally scheduled to take effect on January 1, 2023. Implementation was subsequently delayed until July 1, 2023.

Participation in the WA Cares Fund program is mandatory, unless an employee meets the criteria to claim an exemption from WA Cares coverage.

The WA Cares Fund tax is work-based. It applies to both residents and non-residents whose work is localized in Washington. Generally, employers will collect premiums for the same employees who are covered for Washington PFML.

Definitions for who contributes to the WA Cares Fund (Long-Term Services and Supports or LTSS) in RCW 50B.04.010 refer back to the Paid Family and Medical Leave Program (PFML) definitions in RCW 50A.05.010. This includes the definition of “Employment” in (8). If premiums are not assessed for the PFML program, they will not be assessed for the WA Cares Fund.

Details

Taxable Wages:
The WA Cares Fund Tax follows the Washington TT:087 (Employee Family Leave Insurance Tax) definition of taxable wages.
"Wage or wages" means all remuneration paid by an employer to an employee. Remuneration has the meaning provided in RCW 50A.05.010. All wages are subject to a premium assessment and not limited by the commissioner of the employment security department, as provided under RCW 50A.10.030(4).

Tax Rate:
The WA Cares Fund tax rate is .58% of taxable wages. There is no maximum wage limit. The tax applies to both regular wages and supplemental wages. It is applied each time the employee is paid.

Who pays:
The tax is paid by employees only. Employers do not share in the tax. However, employers have the option to pay WA Cares Fund premiums on the employee’s behalf.

Exemption Option:
During the 2022 legislative session, Governor Inslee and the legislature created several exemption pathways for Washington workers who are not likely to use their WA Cares benefits in the future. Details are on the WA Cares Fund Website.

Taxable/Reportable Wage Rule:
Guidance on whether or not the WA Cares Fund Premium deduction will be reported on Form W-2 is pending. However, it will most likely follow the Washington PFML rule.

[CarlosAccorsi]

Hello Cherylnita,

I'm checking this internally.

Best,
Carlos

[LenaSumrell1]

Hello Graziela, I am receiving error from /TB6 Secure 2.0 changes after October support packs.  Error is below. I did not expect this to generate any secure 2.0 acts wage types.

Export payroll results
Incorrect currency for amount
A wage type does not have the currency for the amount field
/TB6 3,413.65
Please check whether the function XDECI with parameter
FILL or CONV is in the correct place in the schema

Has anyone else had this occur?

 

Regards,

Sumrell  

[graziela]

Hello Sumrell,

As per Developer information /TB6 will always be generated. Even if the functionality is not activated.
This is just a technical wage type.

Regarding the message there is a PY-XX KBA:

1534795 - Error "Incorrect currency for amount" when running payroll

Kind regards,
Graziela

[stevenan]

Hello,

We had this issue as well.  Please check subschema UNA0 and make sure the XDECI functions are not commented.  Ours were on our new ECP implementation but were not in our legacy SAP system.  Don't know how or why this happened but uncommenting fixed the issue.

Anna

[LenaSumrell1]

ok however it is failing with an error at the EXPRT portion of the schema.

[LenaSumrell1]

Hi Anna, thank you I will check that.

 

Lena

[LenaSumrell1]

That was it Anna, thank you again.

[stevenan]

You're welcome!

[former_member649267]

Hi Jain,

 

The concept i used in RULE ZCRL is

ELIMI *

ADDWTE/PPE. This way the entries are clubbed and added to RT as one single wage type with final amount.

Then under BSI interface PPE is called in with the amount and its reducing the amount from taxable gross... is this is what you did to make this work? Can you please confirm?

[former_member649267]

Hi Carlos,

We have multiple Alabama overtime wages types coming for bi-weekly employees and unfortunately system takes only the first /PPE wage type amount into BSI and reduce the amount for Alabama taxable gross which is incorrect.

So now i wrote a rule in ZCRL as follows:

ELIMI *

ADDWTE/PPE. This way the entries are clubbed and added to RT as one single wage type with final amount.

Then under BSI interface PPE is called in with the amount and its reducing the amount from taxable gross... is this is what we need to do to make this work? Can you please confirm?

 

[miteshjain]

Yes, we've used ELIMI * before creating /PPE in RT. In addition, we're processing this logic only if the check date is on or after 1/1/2024 for work state of Alabama (custom function to check work state).

[jwiblepasshe22]

FYI, in case not everyone received, see email below received from BSI regarding the 2024 Federal Tax tables received just now on 12/18/2023:

Per the attachment the Federal Tables for 2024 will be in TUB 128

"On December 13, 2023, the IRS released the second draft version of the 2024 Publication 15-T, which contains withholding tax calculation changes that take effect January 1,2024. Due to the late date, BSI has proactively developed the 2024 Federal withholding changes, based on the draft release. Please download and review the attached document for more information."

[CarlosAccorsi]

Hello Joe,

I see that you've opened a case addressing this topic.
My colleague has already followed up with you.

Best Regards,
Carlos

[CarlosAccorsi]

Hello Hemanth,

As per your description, my understanding is that you've set wage type /PPE as a pre-tax deduction on your system by the Tax Model configuration, so it's reducing the gross wages.
My suggestion would be for you to validate if this is the correct approach among your business team, and also with BSI team, that should help you in understanding the tax calculation on that, which should provide you some insights.

Best Regards,
Carlos

[hemnth_kumar]

Hi Jain,

In the above logic how does reciprocity works. Example Employee residing in Alabama and working in Colorado. Employee want both taxes (Alabama/Colorado) taken out.. in this scenario /PPE wont be cumulated for Alabama employees (As employee is residing in Alabama not working). in this special case scenario how does your system handle.

For these special case scenario, we just cumulated /PPE for all tax authority, /PPE will be consider only for Alabama Employee which will further reduce taxable gross for Alabama employees under BSI interface.

/701 AL = /701 AL - /PPE (WAGE TYPE)

 

 

[hemnth_kumar]

Hi Pavan,

How does reciprocity works for Alabama employees in your system. We cumulate /PPE for all tax authority.

Example: Employee residing in Alabama and working in Colorado. Employee want both taxes (Alabama/Colorado) taken out.. in this scenario /PPE wont be cumulated for Alabama employees (As employee is residing in Alabama not working). in this special case scenario how does your system handle.

For these special case scenario, we just cumulated /PPE for all tax authority, /PPE will be consider only for Alabama Employee which will further reduce taxable gross for Alabama employees under BSI interface.

/701 AL = /701 AL - /PPE (WAGE TYPE)

so its better to cumulate /PPE for all tax authority correct? or did you write any special rule which process /PPE only for Alabama employees only?

 

Can you please confirm?

[hemnth_kumar]

Hi Pavan,

How does reciprocity works for Alabama employees in your system. We cumulate /PPE for all tax authority.

Example: Employee residing in Alabama and working in Colorado. Employee want both taxes (Alabama/Colorado) taken out.. in this scenario /PPE wont be cumulated for Alabama employees (As employee is residing in Alabama not working). in this special case scenario how does your system handle.

For these special case scenario, we just cumulated /PPE for all tax authority, /PPE will be consider only for Alabama Employee which will further reduce taxable gross for Alabama employees under BSI interface.

/701 AL = /701 AL - /PPE (WAGE TYPE)

so its better to cumulate /PPE for all tax authority correct? or did you write any special rule which process /PPE only for Alabama employees only?

 

Can you please confirm?

[miteshjain]

Hemanth,

I believe this scenario is documented in the release note for cyclic 11.0k under Alabama Withholding Special Note. Did you review this note and discuss with your business team if that applies to your scenario?

Mitesh

[dduron]

Good morning community,

 

Does anyone know which BSI tax bulletin will contain the 2024 tax tables and the release date?

 

Kind regards,

 

Debbie

 

[jwiblepasshe22]

Yes, they will be out tomorrow (12/20/2023) as part of TUB 128. BSI sent out an email notification yesterday.

 

"On December 13, 2023, the IRS released the second draft version of the 2024 Publication 15-T, which contains withholding tax calculation changes that take effect January 1,2024. Due to the late date, BSI has proactively developed the 2024 Federal withholding changes, based on the draft release. Please download and review the attached document for more information."

[dduron]

Great!  Thank you, Jeff!  Much appreciated!

[richaknotts79]

Hi Graziela,

Following up on this requirement as we are planning for the last YE transports to go to Prod.

Any update you have is greatly appreciated.

Best,

Richa

[graziela]

Hello Richa,

This is the link for the Legal change notification, for Q4/2023

https://launchpad.support.sap.com/#/legalchangenotification/NoteInforSet/jira=GSREQAMER-4740/MidColu...

kind regards,
Graziela

[Manikak]

Hi Carlos, Cherylnita,

Thanks for the query!

First of all, as per the OR DOR iwire  - It is not required!  Here is the link to the FAQ (please check #7). This FAQ was updated on Updated September 20, 2023.

There is NO direction on OR Paid Family Leave website.

Since we got a query where a couple of customers shared the Memo, we reached out to -

a) OR Paid family leave via email as well as via Phone.  I spoke with Paid Family Leave representative (Pamela) and according to them, they don't have anything on their portal and they were not aware of this Memo from Governor Kate Brown (OCT 2023). They did mention that they were instructed to say that it be reported on Box 14 of W-2. Then Pamela said that we should check with OR DOR as OR DOR is the one handling W-2.

b) I spoke with OR DOR Tax Payer dept (503.378.4988 - Spoke with Jimmy) - They have no direction on this reporting; They also were not aware of this Memo and they directed me to DOR Business Unit for Payroll Team.

c) Now here i spoke with Nicole (503.945.8100), According to Nicole - they are not aware of this memo. Nicole also checked with iWire technician and they said it is NOT required. They also directed us to link to the FAQ (please check #7). Here it says clearly under FAQ# 7 -

        7. Do I need to report Paid Leave Oregon contributions on my W-2?
                  No. You do not need to report Paid Leave Oregon contributions on W-2s.

There is also no change on file format!

Now if we go by the Memo  - yes, it does say that - it is NOT required but if Employers want to report they can do so in W-2 Box14. Now, if we scroll to the end of the Memo  - It ALSO says  -

"The opinion expressed in this letter does not bind the department or the requestor to the  statement of facts or opinion expressed."

Now we are at a cross road!

a) OR DOR says  - NOT required and this is stated on their website.

b) OR Paid Leave website does not mention anything for reporting on W-2 Box 14. They do mention when we call. At the same time, they also tell us to check with OR DOR as W-2 is handled by them.

c) Memo says "opinion expressed in this letter does not bind the department"

So, looking at the whole picture and also giving the possibility of reporting PFML on W-2 Box 14 to our customer base since OR Paid Family Leave representative mentioned verbally to us, we are evaluating and planning  (subject to change per direction from authority) -

• Planning to have a bucket for W-2 Box 14 without TFG (Tax Form Group) mapped. Which means that default is - not reporting. And if customer wants to report, they can do so by mapping the TFG (Tax Form Group). This we plan to mention in the SAP Note. (subject to change per direction from authority)

Hope this helps. Carlos/Grazi can take it from here and update all for any new updates.

All the best with year-end 2023!

Best Regards,

Mani Kak
Globalization Product Management (GPM)

SAP Globalization Services
Local Solutions. Global Success

Visit SAP Globalization Services for more info.

Visit TR Solution Document for U.S Tax Reporter Solution (PY-US-TR)

[eliza4c]

Hi Graziela,

Not sure if this question belongs here, so I can remove it if not,

After applying annual patches, we noticed that we can no longer change the END date of one of the bank details (IT 0009) for employees who have multiple bank accounts. I am referring to changing the end date, not delimiting, for bank details of type "Other Bank - 1". I am not trying to END the Main bank details but the "other bank". I get error saying: "Change in the payroll past not possible". Again, I must delimit the entry to end it.

I compared this behavior with an unpatched system and the latter works as we have always seen it before patches with the ability to just enter an end date of 12/01/23 for example without having to delimit. Thanks for your help.

Elizabeth

[CarlosAccorsi]

Hi Elizabeth,

The scenario reported is under the scope of PA-PA-XX team while this blog is reversed for PY-US-TR.

I was able to locate this documentation though: 2847774 (Error Message PG710 - Change in the payroll past not possible while trying to create infotype records in PA30).
In case you'd like further help on that, my suggestion is to open a ticket for PA-PA-XX team directly.

Happy Holidays,
Carlos

[Manikak]

Just an update - received email from Anneliese Evans, iWire Administration Operations and Policy Analyst

According to them - "For Tax Year 2023, businesses are not required to file Paid Family Leave. If the business does wish to report this information then they can put the information in Box 14".

So our plans stays as explained above.

Best Regards,

Mani Kak
Globalization Product Management (GPM)

SAP Globalization Services
Local Solutions. Global Success

Visit SAP Globalization Services for more info.

Visit TR Solution Document for U.S Tax Reporter Solution (PY-US-TR)

[jwiblepasshe22]

Update - We just checked with BSI again and received this response:

"BSI provided early access on the BSI portal to Regulatory Bulletin 128 cover page ONLY for review of 2024 changes. The regulatory data file will be made available on the BSI portal as usual after its December 20, 2023, deployment. The schedule for SAP is set tentatively for 12/23/2023. Customers will be notified upon deployment."

[eliza4c]

Thank you Carlos! Will review. Much appreciated.

Happy Holidays,

Elizabeth

[juli_thompson]

Good Morning,

 

Just curious on a ETA for the Phase III Year end note?

 

thank you,

Juli

 

 

[graziela]

HI Juli,

Friday, 22.12.2023.

Kind regards,
Graziela

[former_member553352]

Good afternoon,

I'm fairly new at applying notes and I'm curious as to order to apply the notes listed in the "Notes to be implemented after the Year End Support Package" section.  Should we apply these after applying Phase III notes if there is no clear prereq/postreq section on these notes?

Similarly, for the applicable notes in the 'Legal Changes for the US' section.  Should we apply those after the Phase III notes?

Thanks for your help,

Glenn

btw we are on SAP_HR 6.08 C4 with Phase II applied in development at this point.

[CarlosAccorsi]

Hello Glenn,

The notes listed on the section "Notes to be implemented after the Year End Support Package" delivery corrections for issues that come once the Year End support package is applied. The ideia in listing the notes is that you can apply them right after you applied the support package on your system, so you can avoid the issues to happen.

As per the order these notes should be applied, there's not a wrong/right order so you can apply them as it fits you better. You just need to ensure that you have the prerequisites of each note before applying it, but SNOTE should inform you on that.

Happy Holidays,
Carlos

[former_member553352]

Thank you Carlos.  That makes sense, so after we applied C4 support pack back in November, we could have immediately started applying those notes.  We did not need to wait and do it as part of our application of Phase Notes (I, II, or III), which is where we were getting confused. 

Thanks Again and Happy Holidays!

[ChandraV]

Hello team, this is a question on ACA; we applied the ACA note - "3377965 ACA: Updates for tax year 2023" in our QA box for testing; when testing this note, at the generate XML files for transmission stage (transaction HRBENUS_ACA_XML), we are getting a warning message "The XML file generation is using the schema for year 2022"; Is this normal? should we be seeing this message after applying the note? we are on HRSP608 C4.

Thanks

Chandra

[afunck]

The "November HRSP C5" download SAPK-608C5INSAPHRCUS does not seem to be reachable.

This page charts out the Quick SAP Note Search Filters for US Year-End 2023:

3357714 – U.S. Tax Reporter Year End 2023 Announcement

 

It provides this link for searching for the C5 package:

https://me.sap.com/softwarecenter/search/SAPK-608C5INSAPHRCUS

 

But there is no result (including when I search for it manually).

I'm not sure how to proceed as C6 & C7 are already available and we will be seeking to apply those.

[CarlosAccorsi]

Hello Community,

The following notes have just been released:

3412754 (TR: Year End 2023 Phase III for U.S. Tax Reporter).
3412756 (TR: Q4/2023 Functional Changes for U.S. Tax Reporter).

Merry Christmas!
Carlos

[former_member553352]

We are trying to implement the Phase III note just released.  The very first instruction in the note when implementing is to execute the manual instructions.  The first manual instruction 1 is to run report NOTE_3412754, however the report is not loaded yet into our system and not available in SE38 to run. 

Normally doesn't this type of report get released in a prereq note to the Phase Note itself?

[CarlosAccorsi]

Hello Glenn,

Report NOTE_3412754 is delivered by note 3412754.
You should first apply the note on your system, then follow its manual instructions.

Best Regards,
Carlos

[former_member553352]

Thanks Carlos!

[graziela]

Hello Adam,

As per the link:
HR Support Packages for EHP8 (sap.com)

C5 is the Synchronization Package, so there isn´t CLC.
To download C5, you can use:

Software Center - SAP for Me

Kind regards,
Graziela

[graziela]

Hello Chandra,

For ACA questions, you can join the SAP WorkZone Collaboration Group, further details in how to do it you can find on SAP note:

3391320 - ACA: FAQ Note for Affordable Care Act Reporting Tax Year 2023 / Reporting Year 2024

Kind regards,
Graziela

 

[duane_cornforth]

Hello Graziela,

I have a simple question relating to the 2024 AL OT Exemption functionality.  I see that we are supposed to add the overtime exemption amount to wage type /PPE.  I am not seeing this wage type in my system.  Is the /PPE wage type delivered by SAP or are we supposed to create it?  Thanks.

Duane

 

[Euna]

We created it with the note, but I think if you have applied SP, it should be created for you.

 

Regards,

Euna

[duane_cornforth]

Euna,

Thanks for the reply.  Which note if you don't mind me asking?  I think we are current on our SPs also, so I was surprised that I didn't see it.

Duane

[Euna]

3392866 - TAX: Alabama Overtime Pay Exemption beginning January 1, 2024

[duane_cornforth]

OK.  I will see if we can apply that note again.  Thank you.